How Much Do Real Estate Agents Really Make? (And Where Does All That Commission Go?)

by Heath Sullivan

If you’ve ever seen a closing statement and thought, “Dang, the real estate agent made HOW MUCH on this one deal?” you’re not alone.

On paper, it can look like agents are pulling in huge checks for “just putting a sign in the yard” or “opening a few doors.” The truth is a lot more complicated—and a lot less glamorous—than most people realize.

In this post, I’ll break down how much real estate agents actually make, how commission is split, and what’s left after expenses so you can understand where your money is really going.

What Most People Think vs. How It Actually Works

The common belief:

“The agent gets 5–6% of the sale price. Must be nice.”

Reality check:

Most agents are 100% commission only (no salary, no benefits).
That commission is split multiple times before it ever hits their bank account.
From what’s left, they still have to pay all their business expenses and taxes.

So yes, a commission check can look big… but it doesn’t equal pure profit.

A Simple Commission Example

Let’s use a clean, made-up example:

Home sells for $500,000
Total commission agreed in the listing: 6%
That’s $30,000 in total commission

Here’s what usually happens:

The seller agrees to that 6% in the listing agreement.
At closing, that 6% goes to the listing brokerage.
The listing brokerage typically shares part of that with the buyer’s brokerage.
- Example: 3% to the listing side, 3% to the buyer side
Each brokerage then splits its portion with the individual agent according to their contract.

So if you’re the buyer’s agent in this example:

Buyer’s side commission: 3% of $500,000 = $15,000
Your brokerage split (for example): 70% to you / 30% to the brokerage
$15,000 × 70% = $10,500 gross to you as the agent

Looks like a nice payday, right?
Now let’s look at what gets peeled off of that $10,500.

What Comes Out of an Agent’s Commission

Real estate agents are usually independent contractors, not employees. That means they’re running a small business, and almost everything comes out of that gross commission:

Brokerage fees / desk fees
MLS and association dues
Supra/lockbox fees and signs
Professional photography and video
Staging consults or light staging
Marketing & advertising (flyers, open house materials, mailers, paid ads, online marketing)
CRM and software tools
Vehicle costs (fuel, maintenance, insurance, car payment)
Self-employment taxes
Health insurance & retirement (no employer benefits)
Continuing education, coaching, conferences

By the time all of that is paid, that $10,500 might be closer to half—or even less—as actual income.

It’s Not Just How Much, It’s How Often

Another huge piece people forget:

Agents don’t get paid regularly.

There is no every-two-weeks paycheck. It’s more like:

Nothing for a month or two
Then a couple of closings
Then a dry spell
Then a cluster of deals

That $10,500 check from one sale often has to:

Catch up on past expenses
Fund new marketing for future clients
Cover months with no closings

So when you hear a number like “That agent made $100,000 this year,” that might be the top-line gross, not what they personally live on after expenses and taxes.

So… How Much Do Real Estate Agents Actually Make in a Year?

It really depends on:

How many homes they help clients buy or sell
The price points of those homes
Their brokerage split
Their market and competition
How serious they are about it (part-time hobby vs full-time pro)

Generally speaking:

Some agents make very little because they close only a handful of deals or treat it as a side gig.
Solid, full-time agents often land in the same ballpark as other licensed professionals once you account for risk and expenses.
Top-producing agents and teams can earn well into six figures, but they’re usually working long hours, carrying big overhead, and managing a lot of complexity behind the scenes.

Why This Matters to You as a Consumer

You might be wondering, “Okay, cool, but why should I care what an agent makes?”

Because understanding how we’re paid helps you understand:

Why experience matters – Someone who treats this like a real business has the systems, marketing, negotiation skills, and support to protect you.
Why “cheapest” isn’t always best – You’re usually not just paying for time; you’re paying for skill, strategy, and risk management.
Why transparency matters – You should know exactly how your agent gets paid and what you’re getting in return.

When you hire a good agent, you’re not paying them for the few hours you see—you’re paying for:

The years they’ve spent learning the contracts and the pitfalls
The relationships they’ve built with lenders, inspectors, and vendors
The marketing they invest in so your home doesn’t sit stale
The negotiation experience that can literally put money back in your pocket

My Promise as Your Agent

As an agent, I never want commission to feel like a mystery or a taboo topic. If you’re thinking about buying or selling, we can sit down and go over: